In August, President Barack Obama and the congress agreed to reduce the U.S. Department of defence budget by $487 billion over a decade. According to the Associated Press, the $614 billion defence budget for 2013 is about $32 billion less than this year’s budget.The pundits, politicians and experts have all chimed regarding the U.S. Department of defence spending, but this week at the J.P. Morgan Aviation, Transportation & defence conference, the numbers are speaking for themselves. As companies make their presentation before investors and advisers, their financials and outlook on the market might give us some insight into the actual defence spending.
Among the companies presenting were:
- Alliant Techsystems Inc. (NYSE: ATK) -producer of solid rocket propulsion systems and a leading supplier of military and commercial aircraft structures
- ITT Exelis (NYSE: XLS) – provider of variety services such as surveillance, monitoring, communication and satellite systems as well as vehicle and equipment maintenance.
- Moog Inc. (NYSE: MOG) – designer and supplier of motion control technology and aircraft and missile components.
- Kaman Corporation(NYSE: KAMN) – a manufacturer of self-lube airframe bearings, aerostructures, helicopter service and support and helicopter systems and components
Companies such as ATK provide U.S. Government with variety of products and services, which often leads to a large part of their portfolio being dependent on the U.S. Government
According to the company's annual report, no single customer, other than the U.S. Government customers listed below, accounted for more than 10 per cent of its fiscal 2011 sales.
Many of these companies report contracted backlog to be in billions of dollars, similar to ATK's as show below
As is Moog, whose most recent segment sales report shows decreased spending in Space and Security Surveillance sector
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